BTS Tactical Fixed Income Fund now a mutual, not hedge, fund

By Toni Weeks

San Luis Obispo, Calif., June 11 - BTS Asset Management, Inc. announced the conversion of the BTS Tactical Fixed Income Fund LLC to a 1940 Act mutual fund from a hedge fund.

The fund seeks to maximize total return and deliver equity-like returns with traditional bond-like risk. The fund rotates bond classes while implementing stop-loss measures in an attempt to control downside risk.

"By converting to a mutual fund, individual investors can access a hedge fund strategy with the structure, liquidity and transparency of a traditional mutual fund," BTS Asset Management president Isaac Braley said in a press release.

According to the release, many income-focused investors are discouraged with the historic low yields offered by some fixed-income investments and are also concerned with the effects of a rising-rate environment. The fund is designed to handle such cases, the release said.

"Typically, hedge fund investments have only been available to wealthy individuals or institutional investors," chief executive officer Matthew Pasts said in the release. "We think retail investors are likely to discover the potential benefits of tactical investing, especially when guided by their investment adviser. Our tactical approach tries to avoid major drawdowns and deliver steady returns over time."

The fund invests in high-yield bonds, U.S. government bonds and cash. These allocations allow the fund to increase exposure to bond sectors when indicators are positive and decrease exposure when indicators are negative.

"We seek to focus on the right bond asset class at the right time versus a widely diversified bond approach," Braley said. "We believe that investing in bonds with low correlations to one another can offer upside potential and downside protection."

The fund trades on the Nasdaq Stock Exchange under the symbols "BTFAX" and "BTFCX."

Investment adviser BTS Asset Management is based in Lexington, Mass.

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